If you find your collaborative working moving towards merger discussions, then you may find this 20 page document from the National Housing Federation’s board helpful.
Published at the end of last year, it is the NHF’s approved merger code, devised to encourage good practice, promote transparency and dispel perceptions of inefficiency.
The document, entitled Voluntary Code for Housing Association Mergers, Group Structures and Partnerships, suggests ten principles to provide guidance on how boards should deal with the first stage of a merger process. The ten are set out on the next page.
A framework to work to…
The press release that accompanied the publication states that, “Produced on our behalf by Savills, this code has been written to provide a framework for organisations’ boards and executives to work to, having decided that a merger, group structure or other partnership is the best way forward for their organisations and tenants.
It is a voluntary code and not prescriptive. It does not seek to influence the outcome of dialogue on mergers or other forms of partnership. It sets out clear principles for boards and the executive to consider when they explore the questions of merger, group structure or partnership opportunities.
This Code sits alongside a suite of relevant law and regulatory requirements and other codes supporting excellence in governance in the housing association sector. It seeks to provide a baseline rather than a ceiling, and adopters of the Code may choose to be bolder in their approach.”
The report is said to be responding to significant changes in the sector caused by policies such as the 1% social rent cut and the voluntary extension of Right to Buy.
An Inside Housing survey of housing association chief executives in 2015 found that one in three of 129 respondents were likely to consider a merger to cope with budget shortfalls in 2016/17.
Paul Hackett, Chief Executive of Amicus Horizon, which has been in merger negotiations with Viridian, told Inside Housing that the code would be welcomed by well-run associations and apply pressure on those that are less efficient.
But not everyone agrees…
However, not everyone welcomed the code. In May 2016, Inside Housing reported that a group of nine housing associations had commissioned consultancy Housing Quality Network and law firm Anthony Collins Solicitors to come up with a new set of guidelines for mergers, as they are unhappy with the NHF’s code, which they feel is too prescriptive.
So whilst the document may be helpful for inspiring partners outside or inside housing, don’t accept it as a definitive document – more as one of a number of options for exploration of what a merger may require.